Retailers suffer weakest December in years

08/01/2008

The end of 2007 marked the worst quarter for retailers in nearly two years, according to new research.

The Grant Thornton Quoted Retail Companies Index for Q4 2007 recorded 22% of retailers posting negative trading updates – a rise of 15% on Q3. This is the highest figure since the first quarter of 2006, Grant Thornton said.

The number of positive trading updates also dropped to 41% - down from 62% in Q3.

David Bush, head of Grant Thornton's retail services team, said: “Despite December's reduction in interest rates, consumer confidence appeared to fall significantly during the final quarter of 2007, resulting in the highest number of negative trading statements issued in nearly two years.”

He added: “However, it remains to be seen whether the subsequent well publicised post-Christmas sales frenzy will have been enough to fully offset the slow start to Christmas trading and a sluggish quarter overall.”

Figures from the British Retail Consortium (BRC) also recorded poor retail results for the year-end.

Sales rose by a mere 0.3% on a like-for-like basis, compared to December 2006 where there was a 2.5% rise. The BRC said last month’s sales were the worst December since 2004.

Kevin Hawkins, director general of the BRC, said:

“This result is somewhat worse than we expected and points to a very challenging first half for 2008. Given that the full effects of the Bank’s previous increases in interest rates have yet to be felt by many households, retailers and manufacturers alike need a rate cut now – preferably a full half-point.”